Like several other bitcoin (BTC) treasury companies, Ethereum treasury companies have started to sell their ether (ETH) to pay down debt.
This month, Peter Thiel-backed treasury ETHZilla sold $74.5 million of its ETH to retire some of its bonds.
Worse, the company is seemingly abandoning its guidance entirely, selling one-quarter of its entire treasury in its latest sale after previously selling $40 million in October.
It no longer talks about building or holding an ETH treasury, focusing instead on a spattering of “revenues through various DeFi protocols.”
In early summer 2025, there was a brief fad on Wall Street of digital asset treasury (DAT) companies. Many investors believed these companies would never sell their holdings and bought them as leveraged proxies on their underlying holdings.
“Never sell your BTC,” chanted Strategy founder Michael Saylor, the leader of Strategy (formerly MicroStrategy), the world’s largest DAT. “Sell a kidney if you must,” he implored, “but keep the BTC.”
Fast forward to today, and several companies are selling off their treasuries to pay debt. Even Strategy is actively talking about selling its BTC for “coverage.”
Read more: Ethereum MicroStrategy clone has shaky start, sends 165 ETH to wrong address
That ETH ‘treasury’ sure looks like a general fund
Sequans, BitFarms, FG Nexus, Genius Group, and Satsuma Technology are a few DATs that have sold crypto from their so-called treasuries. Like ETHZilla, ETH treasury company FG Nexus has sold holdings.
Financial leverage is, after all, indebtedness. Although leverage rewards traders on the way up, it amplifies losses on the way down. Crypto has had a bad year — shedding approximately $500 billion in market capitalization since January 1 — and debts always come due.
Leverage takes many forms.
Although some DATs have regular corporate bonds outstanding, others mask their indebtedness by encumbering future cash flows with preferred shares, burying payouts or future equity convertibles within contracts.
They may also advertise future dividends or share repurchases, or issue foreign securities that will siphon future cash flow.
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